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Fort el ?right on,

.t.nantic City, N. J.
February 24, 1926.

Dear Monty:

From t he encicsed you will obse've that the first
steps to,,,,:::rds that some Ilmerican humorist, in speakinp of

'.'illson at the Peace nonferen co, described as "abdication,"
are apparently already under way in my case in London. I
thought you v,:ould be amused by the enclosed if you have not
already had a laugh over it .
!'.irrerolj yours,

Rt. Hon. Montagu C. rorman,
Thorpe Lodge,
Campden Hill,
London, .:/iLland.

Hot el nright on,

At lant is City, N. J.,

Dour Monty:

:very day I feel t let I should take n pen and rite you a
decent letter, such a one us you have written me wll ile I have been
laid up.
it has been impossible to do so because the few hand-

written letters that I felt 0(0E1 to writing have been usu Hy to
Katharine or come of the family, and there I have stopped.
"'his is mainly to let you :nos elys el f just how I rarn getting
al nz . It seems t hat the fatieue c t Ile trip to Lend on, or the bad
weat her, or se m° ill-d is posed bug, re 31 It e LI in s t irri rg. up th at le ft

lung of mine a bit, and I imakine that I Ind e narro''i escape from
another dose of bronchial pneumanie. By good fortune the :actor put
the clumps on instantly, and es soon as the nurses took eharg-e and
kept me obso utely quiet I began to improve and hal no set-backs.
Now I ma very much better irtleel, but must still be careful so lonF
as t he bad wept:Ler continues, and that may keep me here in Atlant ic
City for another two weeks. :%7 temperature is performing ell r L-ht,
appetite is ood, en.1 I am beginnin, now to walk every day and to rot
my strength back. There is hardly more to say than this, except to
say tlat Dr. Miller gives an excellent report follasing: the last exam-

ination, pictures, etc., and says that I will be as well as ever. That
may not be much, but at least it is enoTh to keep me go in
:',17 plans, of course, have all been disarranged. By taking
some risk I could probably sail within the n xt few we a, but there
is some hazard in do iz so, sad I did not want to et out of r each of
the d cot-or who knows all about me before I lad a coo:3 mart in of at ron

:3o the best I can now promise is to sail in "ay.

If I do it may or may


wit. Eon.

nt apu C. Norman



not be desirable for me to Eo to the !!editerranean. I may d °Glee to
go right to Cherbourg, rota to :'aria, and deteriine my next stop by
the weather and how I feel. his rill keep your plans in suspense,

I greatly refrat it.

few words dn'ped by Fiemeyer, and scam of the rssaios
to the bank have troubled me a go cr3 deal about you. The trouble with
your teeth a nd some ^egreaston Inv() led me to believe that r,e should
have a. visit in the near future. If you are um:ble to join me later
when I reach ,:urope p6ssib1y you could slip over here for a short
visit before I sail and then return with rap. Please give me an indioation of the pos2ib little 3. I know that in March you are badly engrossed in bank matters, but
miOlt permit an absence, end then
:could have a visit before I started my trip. It seem likely this
year that Mr. Harrison will pa abroad at 'Ye same time that I do or
that our visits will overlap. I want him to have a lc.n- enotrh visit
to nevItinint him with matters abroad vrIry fully, and to combine it with
a good rest somewhfq-e, and if we could all do that it would be grand.
Thin's,. this ell over arr let 7'7)3 knpw hot it strikes you. In
the meantime, Old Chap, I send you my very best. I have been a poor
partner lately, but am tr.; ins to improve.
".7 e

r7uch affect I on.
1.113 er ely yours,

Hon. Montagu


C/o Sank of .',rrland
Long on,
C., v;n31:nd.




Betel arts kt On,

Atlantio City, N. Jo,
Minh 3. 192e.
Des? Monty:

I had dictated a low letter to you some days ago, primalpally about Roumenia, but the oalOss ixtve been rattling back and

forth, and the letter is now so out of date and unsuitable that
shall not send it To my regret, I find that not only was your letter of January 3 unanswered, but I, in mot, had not read it until
this moment.

That ie a *rt of the roteotlon afforded me during rsp

illness. So just a belated word about Viemeyer's visit .
Es did not sew to have allowed the pre send e of his wife to
interfere in any way in devoting himself to the real objeot of his
visit Of oourse, I was unable t o see him as much as I should have
liked, and as for myself, his visit was disappoiding beoauee of my
illness. There were many thiwe to disauss which were dealt with
very sketohily. Some of our ladies at the bank endeavored to deal
with liras Niemeyer' s vie it $0 that she d id not feel nogleoted, but I
have no details. My illness ea uld have prevented Vier:ewer's staying
at the Marguery anyw ay fa* I was in t he hands of do at or s and nurses.
I am sure he bag established himself with my oolleagues at
the bank, he had no 000asion to do that with me as That had been
dons long ago.

1.4V erY vie it au& as h is promotes just what w e are

seeking: to establish, and that is enciuring relations, no we hope that
they wi 11 ant anus regularly just a a ours d o.
we did ova opportunity for a pretty thorough discussion ce
the three poirts mentioned in your letter, and had the good fiertune
to have Jeremiah Dlith there twioe to take part.
As to These three topiost

Et. Eon. Montagu C. liorman
?Jr at




I an e :tee t kat 4rbetther yeti nor he expects to a coo raw

plieh very much in the IV OF of tufareuse or intervention in the affai re
of the finenee committee of the League. But, of couree, Re are glad
to cooperate, and the important thire to me ie to arrange that that

000peretion will be such as not to interfere with the real spirit


cooperation between the banks of issue.
Thenever the *situation arieee, ae I feared you'd he the case
with h
where we must choose between one or another central
bank, and in that instance, between E League program or a bank program, we are, of °aurae, at once embarrassee, and naturally eigest
that the banks of issue get t eget le r fir st so that we may avoid taking
part in anyt)eing that might 00 oast on di aharmony rathe r than pr mote

As I expect list and eueenay over here shortly thi s will all
be discussed at length, and I feel very sure that we can get in sore
*sort of accord.
On the seoond point, I explained to Niatemeyer at length

just the way I felt personally, and I believe ray colleagues would all
reiterate what I said to him. A little bit later we mast take off
our coats and taoYie the question of the supply and value of gold and
the relation of central bank policies to the general price level. ';ut
it must be done in such fashion that fads are eliminated,' I am
are that the role of the finance oolmittee of the Leagre is to get
at facts and report them aeourately teed fairly and let the banks of
issue themselves deal with queatione of polioy Along some seoh plan
I believe that we can find moms to give our 000aeration, not only

with the fin

committee but with the banks of :IS 3.20

bill is shortly to be introduced in Congress

f which

In tot, a

1"cteve r'

1111Y not

..Lt 4 uon. xoneszu


s Barran


pees) that will at least indicate tout there is one *tett on in
Washingten that believes that we should actively engage in eueh
studies now.
The third (neati on, about t ha Dawes Play is one of course,
quite outeid e the slope of our authority, End oonserniT leach we ray
have but little influenoe. All that I could Five Vieneyer was an
expression of personal v towel, as I an unable to speak for anyone else.
In feet, in moat features of the matter we discussed I am not even
aware of the views tint CM held bi those vt-; o have the delis 10n9 to
You 1:now,ae to the debts and the :,!awee plan, I hive always

felt tsalt 7Jhula error had arisen on both et des of the Atlentio, the
;..nro peen (Rise had been b ad ly pare jud eed via -a -via our Corm ment by

the ma lad r oit handl IrE; of the matter both i n n egot is ti on aid in pub-

lics ity. The effott to put this country in a poeition where it vans a
pert of the reparation recoveries plan sad would be expeoted to maka
oonoess ions the equivalent of whatever conoesei ons were rude to Car many, Ise been a mistake from the start It was btleed upon a wid a-

spread mistaken not ion of the tanper of the Amerio an people*
the public opinion of this eouary changes from whet it is at present
and good cause is given for mob a °henget, I doubt if 11/waver's idea
of conourrent negotiation of a general settlement is feasible. In
fact, I feel the effort would do arra harm than good.
These are just paeeina refleations ibr what they are worth.
I come time feel tilat you attribute to ree a greater influence in 80110

of these things than I really possees, b2 at least you knowlhow
earnestly I desire to see these aontentioue ?netters satisfaotorily



Yon Moit aga C. Norton

disposed of.


After n March stabilization is aacomiplialnd we must
hitch up our belts and take up the re w set of problem which will
then arise, and if my health pa mate yon know how earnestly T will
join the rEnks*
My beat to you* as always,
Sineerely yours,

3t. Hon* lontegu C. Norma),
Gore rn or , Bank of Eng lain d,

Lon2 on, itnglin d.

3aroh 9, 1923.
My dear Monty:

I am just reading over again your letter of Z ovember 218, and the prin-

cipal complaint I have about it is the very lee estimate in which you holdmy
memory is suggestins that I w

not reessiber Sir Henry Strakosoh.

First and last, I have seen a great deal of hia and have found his
delightful and interesting and stimulating.
This is preliminary to the further suggestion that I am almost ready
to settle dolma with you and ease of the other wise ones to diee.use Chia gold

problem, and it to one of the wet Important things for us to deal with this

On this particular type of question we shall need thre,-, types of minds

if we are to get anyehere. One is that type which can pick out and lel before

us the faote. Another ie the type i ah can expound the theories. And the
third is the praotioal mind ',bleb will sift out the evidence and weigh the
theories, end then decide what to do about it.
Your suggest Strakosoh and 3tewart as collaborators. I Mall have
some suggestions later.

But before tackling the subjeot itself, we aunt eon -

eider procedure, and that really boils down to a choice between a eiall meeting

of repreaentatives of four or five of the tepurtant banks of issue with Rich
support farther:1 as they feel that they require, or a town meeting with all of
the publicity and poeeible public) nicunderetanding which that implies.

As I shall not be sailinc until May 'could you not aeantiwe ttak thi
over with Stewart and Strekoaoh i? you think 'oleo, and let we know th© reeu 1 t

of your cogitations.

Meantime, I can honestly :tains that I an feeling better and begin to

At. 2aa. !2ontagu C. Eamon



feel they've to deal,mith some of these things, onich is a very good apaptom

Poseiblyyem will not oenstroe this as an affirmation o such as o


situ affootionate regards,
Yours moot sineorely,

Rt. Bon. MOntegu C. Norman,

0/0 Beak of &email,
Loudon, B. 0., Hoglund.


March 13, 19 "8.

Dear Mr. Jovernor:

On his return from Atlantic city hr. Strong
received the copy of "Central Banks" which you sere
nough to senu him.

He is still a bit behind with his

Ail, and so he has acitsci me to let you know that it Lzzs

arrived wad that he is looking forwaro to the ple!;ure
of reading it..
r. Strong's recuperation has been ;slow, but
stemdy, fulci while he 1-:s not atteppteo to come u:,sn to

the ofice yet, he is doing considerable work at his

;cry truly yours,

Secret-2ry to Gov,:rnor 3tronz,r.

ht. Hon. Monta-z;u G. Norman,

C/o Hank of a,$1 and,
London, E. C., England.

lashingtn, D. C.,
Unroll ti?,


Ito dear Norman:

There was little opportunity for us to discuss my ten with Fir Henry
Strakne& of last Dm:combe:-, and this is s much belated comment oal.y.

-7-tat he

told me leros -le to believe that Ile holds the followinc views:

That there is an impend7ng shortage of monetary Bola.


That there is certain to be a decline in production by the ::outh

African mines.

That in

nnequence there will be a cOmpatition for col.'3. betmer

banks of issue which will loed to hirh dizocunt retoh coati

falling world comity prices.
is so burdenod with debt



calamitous, possibly bankrupting some urtions.

That the remedy is an extensive and formel devele.77t o7

exchange standPxd.
From the above you will doultlose agree -tth re t7.-t t,tra%csdh is a rl',";

"quantity" theory malit that he holds Carsells VICWS in rernrd to tho 77.10510 gold

position, rue thnt he is alarmed at t1

outlo61,4 tist as most e thy 1,trict own-

tity theory men are, and rather expects thrt the b-nk of 1:312.8 can

so- ?thing

abort it.

he tolls me is proposed consists of:

t study br

7inancial 2-ction of th

7,eaeue of the 2roTress of

economic recovery in ITOVO, which, he asserts, hms closely folloY!ed progress in

the resumption of gold Dement or its evAvalent.

A st,:.dy of thh cold. -problem, alperently in the persretive of to

views of Cris gel ane others.


The slAmission of the reallts, with posAbly ems surgy,stions of


- 2
ontaisu C. Norman

-"77441Ion. r

-11structive nature, to a meeting of the heads of



banks of issue.

Be did not

411"1%) close whether the meeting would be a belated "Genoa resolution meeting or

something* different.

111.-t I told him appeared to shock him, and it w s in brief:

That I did not sharo the fears of Cassel and others as to a gold


That I did not think that the quantity theory of prices, Gurh for

instance as Fisher has elaborated, "reductio ad absurd n," was always dependable
if unadulterated!

That I thought the gold o--change standard as now develop


hazardous in the extreme 14 allowed to proceed very much further, becruae of the
duplication of bank liabilities upon the same gold.

Thet I much preferred to see the central banks build up their actual

Fold metal reserves in their own hands to something like orthodox proportions, and
adopt their own monetary and credit policy and execute it themselves.

That I thought a meeting of the banks of issue in the Immodiate

future to discuss this particular matter would be inopportune and premature, until
the vicissitudes of the Dawes Plan had developed further.

That any formal meeting of the banks of issue, if and when called,

should originate among themselves rather than throigh the League, that the Genoa
resolution was certainly no longer ope-ative, and that such formal deeting should
confine itself very specifically at the outset, first to developing a sound basis
of information, and second, to devising improvements in technique in gold practice
T. am not at all sure that any formal meeting should be held before another
year has elapsed.

If it is held within or after a year. I em quite certain that if

I attended it I could not do so helpfully if it trcitly implied acceptance of the
principles set out in the Genoa resolution.

m. arturu C. Norman

Strahnsch is P fine fellow

I Inn him Immensely, but I would feel

reldatant to !twin in diccunsions where there


likelihood th.n.t the views so

strnney advocated by Fisher, Canso', Veyna, Cimmens and othav_: -load ioam
to prevail.

I 'could be willime at the rrooer tine, if objection were not raised

rt hone, to attend a conference Of th,) blalm of icsuo, if re could agree at the
outset u' on is simple plvtform, i. 0., thPt gold is an effective neasure of value

and medium of frobnee.

If these two principles rre eTtended, as seems to be in

Strnkooch's mind, to ml an that nmAnirulation of gold Ind crolit cna be employed
as a regulator or- prices at all dines and unclIr all circumotancos,

fundamental differences oral inescapable.

PleA7e tone 70 yot'

betiavo ma,
Faithfully yours,

Rt. Ron.

C/o Bank of 72Inglend

London, -T. C., %gland.

then I fear

041 views, and


April 23, 1928.

Uy dear Governor Norman:

This morning when I stopped by the Mareuery to
see Mr. Strong, he hended to me your personal letter to
him dated April 11 concerning Professor Cassel.
We had heard of his coming, through Professor
Seligman, and have already arranged to have him visit us
sometime here at the bank.

..quite apart from that, how-

ever, Mr. Strong hopes t2 have a session with him at his
apartment and that I am now trying to arrange.

This letter gives me an ovortunity to say a
word about Mr. Strong's health.
miserable time.

Frankly, he re :s hed a

At best the shingles are nerve-racking.

But, as luck would hale it, ha has htd a perticulerly bad
case and a rather unusual one in that it located itself
over most of his head and one side of his face.

For a

while his right eye was completely shut and the ether
practically so.

Even now, while he is much bettor, the

superficial eruption still bothers him and his nerves ere
sore and weary.

Dr. Miller says that there has been no indication of any of his old trouble and that there is no
reason why ho should eot go forward with his plans for

Governor Norman


sailing next month.


By mutual agreement, however, they

have fixed the date as May 12 rather than May 5.

.At the

moment, the principal dispute is whether he will go to
Washington the end of this gook for our SprinFT conference
which begins April 50.

No doubt he will 70 if he him-

self fuels up to it at the time, but I hone, without much

encouragement from past experience, tht he will take it
easily if he does go.

Referring to the last paragraph of your letter:
7e have only today received 8 communication from Congressman Strong that he is to resume the hearings on his
stabilization bill next week.

7e also hear rumors that

individual members of the Senate Committee on Banking and
Currency are still debating our possible responsibility
for speculation and brokers' loans.

So you see there

are many who seem to believe that o:le way or another we

can regulate prices - even the prices of particular

I am afraid that if Mr. l'trong goes to

Washin7ton for the Governors Conference, he will get
mixed up in all these other matters.

It is too much

to usk of him just now.

Most sincerely yours,

Right Han. Montagu C. Norman,
Bank of England,
London, England.

Grand Hotel,
Grasse, June 6, 1928.

My dear Monty:

Harrison has just arrived, and while we have only had a preliminary chat about recent developments, he mentioned one matter which troubles
me greatly.

Probably, if there has been a misunderstanding, it arose

partly from my having had no papers with me at Cherbourg, and partly as a
consequence of illness.

He feels that both you and Stewart were surprised - possibly more
than surprised - that I had taken the position in4eur talks that you had
been fully advised, in advance of Moreau's talk with Lubbock, as to our atti-

tude in regard to initiative or leadership in the Roumanian matter.
I certainly must have made a mistake of memory or statement, and
I want to correct it at once.

My recollection of the sequence of events

at Cherbourg was that immediately upon hearing from Moreau by mail that
they had been approached by the Bank of Roumania, Harrison wrote him a letter
raising the question as to whether it was not a suitable case for the League
to handle.

The question of leadership or initiative by the Federal Reserve

Bank was not, however, according to his or my memory, mentioned in that

On the other hand, I had clearly in mind that a copy of the letter

had been sent to you immediately that it was despatched to Moreau.


that my memory or information may have been incorrect.
Also, the definite disclaimer of leadership was, I now realize,
contained in the cable sent to you subsequent to Moreau's visit,

a copy of

which was also cabled to Moreau.

I am writing this at once to make it perfectly clear that if,



Mr. Norman.



now seams the case, I was mistaken in the facts both as to the letter and
the cable, I certainly regret it exceedingly.
I can only say in explanation that there was never a time, from
the moment we fir ©t heard of this business, when we had any intention of

undertaking the responsibility of initiation or of leadership, and I
think our position on that point has been unvarying from the start.
I was also convinced that you had been kept informed in more detail than
was the case.

Probably the sequence of events was not as clear in my

own mind as it would have been had I been attending to these things personally and not been so ill.

At any rate, I think you know me well enough

to realize that if any mistake of that sort has occurred in any statement
that I made to you, I want to be the first to acknowledge it and to express
my regret the minute it is discovered.

It doubtless arose from the fixed

idea in my mind that our position had been as described from the very beginning, and that I have always kept you fully informed, and assumed that
you were then.

It is a great comfort to have such a partner as Harrison to
cheek me up when he feels I am wrong and support me when he thinks I em

Please add this to the catalogue of misdeeds under the title
"misunderstandings to be forgotten" and send me a line of good wishes before you sail:

I've worried a lot about this whole affair and want to be

quit of it.

My best as always.

Right Hon. M. C. Norman,


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102